-- Posted Friday, 14 April 2006 | Digg This Article
It has been some time since we last examined the progress of the developing Global Economic Order (GEO). In the months that have since elapsed, much progress has been made by the internationalists in realizing their goal of bringing the U.S., and the world, closer to a fully integrated global economy.
Now that 2006 is well underway it is fitting that we turn our gaze backward for a moment to view the developments made last year in furthering global economic interests. When we examine 2005 in retrospect, a dominant geo-political theme emerges summarized by that ubiquitous word "democracy."
Hardly a day goes by when the word democracy doesn’t show up in the political and financial press. One of the best selling political titles of the past year was an encomium of the spreading of democracy around the globe, including to countries that have never had a democratic government before. To get an idea of how important democracy is to the ruling elites, consider the following article headline from two recent issues of Foreign Affairs (the official policy organ of the Council on Foreign Relations): "Democratizing the Middle East: A Debate," "Further Democracy in Mexico," and "Iraq and Democratic Peace." Clearly, the subject of how to promote and maintain orderly democracy is on the minds of the world’s leading policy makers.
From the standpoint of GEO, democracy should be of paramount concern to the pro-globalist crowd. Democracy is, after all, the primary engine on which GEO is engaged. And of course money is the lubricant of this engine. The principal goal of the world’s financial architects is a fully integrated global economy -- this much they’ve stated on countless occasions. This goal will require an integrated political structure to lay the groundwork for the economic integration. This is where democracy comes in, for it is an indispensable tool for unifying the social and economic interests of a widely diverse array of peoples. Once established, economic unification becomes a relatively easy affair.
The architects of GEO must work within the grand super-structure of the economic K-wave. This is the economic long-wave of 60 years duration and corresponds with the Kress 60-year financial cycle. The K-wave governs the long-term cycle of inflation/deflation and influences commodity prices as well, including gold and silver, and at the extreme ends impacts stock prices and interest rates. (It isn’t my intent here to discuss the origins of or cosmology of the cycles.)
The Kress conception of the 60-year Super Cycle looks, in part, like this:
The previous 60-year cycle/K-wave bottom was in 1954 and the next one is due to bottom around 2014. Keep in mind that the final 10% of any cycle is the "hard down" phase when the effects of the falling cycle tend to be the most profound.
Within the 60-year cycle are other cycles of lesser duration and magnitude. Among them are the 40-year, the 30-year, the 24-year, and 20-year, the 12-year, the 10-year, the 8-year and the 4-year cycles. These are the cycles that govern the financial operations of the U.S. and any country with a highly developed banking and financial system. These are the cycles with which the nation’s financial controllers must work with (and around).
In past commentaries we’ve discussed the nature of the longer-term cycles. For example, the bottom of the previous 40-year cycle in 1974 that ended the bear market and recession of the early 1970s. We’ve also examined the peak of the 30-year cycle in ‘99 that ended the great secular bear market of the ‘80s and ‘90s. More recently, the 20-year cycle peaked in 2004 at the same time the 10-year cycle bottomed. The 60-year cycle peaked in 1984 and has been declining ever since (one could say the U.S. reached the height of her military and economic might as well as her stature and good standing in the eyes of the world around that time).
So here we are in "K-wave winter" as we head toward that fateful time frame of 2009-2014. With the 60-year, 30-year, 24-year and 20-year cycles no longer up, what is to keep the U.S. economy and financial system afloat? What is to prevent an outright systemic collapse from happening at any time? The answer is both simple and complex.
If you have ever employed the use of a momentum, or rate of change, oscillator in timing stocks and commodities you’ll understand what I’m referring to when I say that in financial markets it’s the last increment that counts the most. Put another way, even when the longer duration rate of change oscillators have peaked, as long as the shorter duration oscillators are still moving up, it can keep the upward momentum in place until all the oscillators have finally peaked. In other words, up until the final "hard down phase" begins, the smaller cycles are more important than the longer ones in keeping a trend intact. It’s the principle of the "last increment" at work.
Now that the longer-term cycles within the 60-year cycle have peaked, the smaller cycles will be used to prop up the financial system until GEO can be completed in time for the last of the longer-term cycles (namely the 10-year and 12-year cycles) to peak in 2008-2009. The 8-year cycle is down until September of this year and when it bottoms it will be one more shorter duration cycle the GEO planners will be able to work with in maintaining what passes for financial stability.
How much can be accomplished with the 8-year, 10-year and 12-year cycles up between the fourth quarter of 2006 until the latter half of 2008 when the 12-year cycle peaks and the final "hard down" phase of the 60-year cycle begins? We will soon find out. The roughly 2-year period beginning later this year and extending through 2008 will undoubtedly be one of head-spinning events and will serve to bring closer a fully integrated and established GEO into realization.
Along with the cycles, the controllers of America’s financial destiny have another valuable tool at their disposal. This tool is psychological in nature and none other than the "fear factor." The ability to generate a perpetual state of fear among the multitudes must be hailed as one of the great discoveries in the field of mass psychology (from the controllers’ viewpoint).
Since the end of the 2000-2003 bear market, the mass mind has been subject to recurring period of great fear and anxiety. All that is required to agitate the public’s consciousness into a state of fear is a sudden catastrophic or largely unexpected event -- be it in the realm of economics, geo-politics or nature -- and instantly the public is induced into a fearful state of mind. This psychological state can in turn be subjected to various forms of manipulation for the benefit of keeping financial markets buoyant, especially in troubling times when the short-term cycles weighing heavy against the market.
Let the market fall more than 5-6% and almost immediately the percentage of bearish investor sentiment jumps off the charts as published by the sentiment surveys such as Investor’s Intelligence. This in turn provides the needed backdrop and gradual repair to the market’s "Wall of Worry" and allows the market to find much-needed support in times of extreme weakness. This pattern has repeated over and again these past couple of years without fail, so firmly entrenched in the public’s mind is the bear market of 2000-2003. This pain won’t soon be forgotten, which is why the "fear factor" will continue to play a major role in the investment outlook for some time to come.
Clif Droke is the editor of the daily Durban Deep/XAU Report, a technical forecast and overview of several leading gold stocks, including DRDGold and the QQQ available at www.clifdroke.com. He is also the author of numerous financial books, including "Gold Stock Almanac 2006."
-- Posted Friday, 14 April 2006 | Digg This Article
